Which of the following is the reason why most economists prefer Heckscher-Ohlin
theory to Ricardo’s theory?
A. Heckscher-Ohlin stresses on the differences in productivity between nations.
B. Ricardo’s theory considers factor endowments to describe national competitiveness.
C. Heckscher-Ohlin theory makes fewer simplifying assumptions.
D. Ricardo’s theory considers the law of marginal returns.
Business ethics that either deny the value of business ethics or apply the concept in a
very unsatisfactory way are termed _____.
A. straw men
B. the Sullivan principles
C. just distribution
D. rights theories
_____ arguments suggest that improving working conditions beyond the level required
by the law and necessary to maximize employee productivity will reduce profits and are
therefore not appropriate.
A. Rawls’
B. Kantian
C. Sullivan’s
D. Friedman’s
The _____ represents the interests of member states and is clearly the ultimate
controlling authority within the EU.
A. European Council
B. European Parliament
C. Court of Justice
D. European Commission
The most important determinant of channel length is the degree to which a retail system
is _____.
A. concentrated
B. fragmented
C. decentralized
D. globalized
A _____ between two countries is an agreement specifying what items of income will
be taxed by the authorities of the country where the income is earned.
A. tax deferral agreement
B. fixed-rate treaty
C. tax treaty
D. free trade agreement
A channel is considered to be short if the producer sells:
A. through an import agent.
B. through a wholesaler.
C. through a retailer.
D. directly to the consumer.
_____ is the collective term for the legal rights relating to the use to which a resource is
put and over the use made of any income that may be derived from that resource.
A. Trade rights
B. Property rights
C. Positive rights
D. Common rights
The free market view argues that international production should be distributed among
countries according to the _____.
A. eclectic paradigm
B. theory of competitive advantage
C. new trade theory
D. theory of comparative advantage The intellectual case for the free market view has
been strengthened by the internalization explanation of FDI. The free market view
argues that international production should be distributed among countries according to
the theory of comparative advantage. Countries should specialize in the production of
those goods and services that they can produce most efficiently. Within this framework,
the MNE is an instrument for dispersing the production of goods and services to the
most efficient locations around the globe. Viewed this way, FDI by the MNE increases
the overall efficiency of the world economy.
GNI and PPP data are useful because they provide a _____ of economic development.
A. dynamic analysis
B. cross-sectional view
C. static analysis
D. global view
Logistics is the activity that controls the:
A. transmission of physical materials through the value chain.
B. customer contact points of a business.
C. activities involved in creating a product.
D. information exchange between a business and its customers.
Pressures for _____ imply that it may not be possible for a firm to realize the full
benefits from economies of scale, learning effects, and location economies.
A. local responsiveness
B. profitability
C. value creation
D. global standardization
Discuss efficiency frontier. How does strategic positioning relate to the efficiency
frontier?
The efficiency frontier shows all of the different positions that a firm can adopt with
regard to adding value to the product and low cost assuming that its internal operations
are configured efficiently to support a particular position. It is important that managers
decide where a firm should be positioned with regard to value and cost, configure
operations accordingly, and manage them efficiently to ensure the firm is operating on
the efficiency frontier. A central tenet of the basic strategy paradigm is that to maximize
its profitability, a firm must do three things: (a) pick a position on the efficiency frontier
that is viable in the sense that there is enough demand to support that choice; (b)
configure its internal operations, such as manufacturing, marketing, logistics,
information systems, human resources, and so on, so that they support that position; and
(c) make sure that the firm has the right organization structure in place to execute its
strategy.
Contrary to Levitt’s suggestions, consumers in the most developed countries are often:
A. willing to sacrifice their preferred attributes for lower prices.
B. not willing to pay more for products that have additional features customized to their
tastes.
C. not willing to sacrifice their preferred attributes for lower prices.
D. willing to accept globally standardized products that have been developed with the
lowest common denominator in mind.
Violation of property rights done through legal mechanisms such as levying excessive
taxation and requiring expensive licenses or permits from property holders is called
_____.
A. private action
B. collective action
C. public action
D. copyright violation
Article 1 of the United Nations Universal Declaration of Human Rights states: All
human beings are born free and equal in dignity and rights. This best echoes:
A. cultural relativism.
B. Friedman doctrine.
C. the righteous moralist approach.
D. Kantian ethics.
ABB Bank is a financial corporation located in England and uses euro as its official
currency. The company borrows 1 million U.S. dollars from a bank based in United
States. ABB will be at a disadvantage if the:
A. Euro appreciates against all currencies.
B. U.S. dollar appreciates against the euro.
C. U.S. dollar depreciates against the euro.
D. fixed exchange rates are used for the transaction.
An ethnocentric approach to staffing is appropriate for firms that are pursuing a(n)
_____.
A. localization strategy
B. international strategy
C. global standardization strategy
D. transnational strategy
Which of the following factors, according to Porter’s national Diamond, is most likely
to give a country competitive advantage over another country?
A. Natural resources
B. Climate
C. Skilled labor
D. Demographics
Administrative trade policies are:
A. requirements that some specific fraction of a good be produced domestically.
B. quotas on trade imposed by the exporting country.
C. bureaucratic rules designed to make it difficult for imports to enter a country.
D. designed to punish foreign firms that engage in dumping.
In a typical international trade transaction, the:
A. exporter should obtain a letter of credit to initiate transactions.
B. importer and exporter maintain an account with the same bank.
C. importer’s bank sends a letter of credit to the exporter’s bank.
D. importer’s bank sends the draft and bill of lading to the exporter’s bank.
Which of the following is a home-country policy aimed at limiting outward FDI flow?
A. Taxing domestic companies’ foreign earnings at a higher rate than their domestic
earnings
B. Implementation of government-backed insurance programs to cover major types of
foreign investment risk
C. Eliminating double taxation of foreign income
D. Persuading host countries to relax their restrictions on inbound FDI Countries have
occasionally manipulated tax rules to try to encourage their firms to invest at home. The
objective behind such policies is to create jobs at home rather than in other nations.
The monetary autonomy argument is supported by the advocates of _____.
A. a dirty-float system
B. fixed exchange rates
C. pegged exchange rates
D. floating exchange rates
International Development Association loans:
A. receive direct funding from the World Bank.
B. must be countersigned by a partnering, wealthy country such as the United States,
Japan, or Germany.
C. are funded through subscriptions from wealthy members.
D. receive direct funding from the International Monetary Fund.
_____ strategy is most appropriate when there are substantial differences across nations
with regard to consumer tastes and preferences, and where cost pressures are not too
intense.
A. Localization
B. Transnational
C. Global standardization
D. International
The _____ adjustment allows for a more direct comparison of living standards in
different countries.
A. gross domestic product
B. value added
C. gross national income (GNI)
D. purchasing power parity (PPP)
Pooling the cash of all the subsidiaries:
A. lowers the interest rate earned.
B. reduces the earning potential for firms.
C. increases the interest rate paid.
D. increases the earning potential for firms.
TRIPS regulations oblige WTO members to do which of the following?
A. grant and enforce patents lasting at least 100 years.
B. grant and enforce copyrights lasting 100 years.
C. comply with the rules within five years in the case of the rich countries.
D. comply with the rules within 10 years in the case of the poorest countries.
Tariff rate quotas are common in agriculture, where their goal is to:
A. reduce the use of synthetic fertilizers.
B. limit imports over quota.
C. increase agricultural imports.
D. increase foreign competition.
The price a firm charges for a good or service is typically less than the value placed on
that good or service by the customer. This is because:
A. the customer’s disposable income is significantly higher than what the market
demands.
B. the customer captures some of that value in the form of a consumer surplus.
C. regulatory mechanisms ensure that the customer is not overcharged for
products/services.
D. marketers implement psychological pricing tactics to ensure that customers perceive
the prices to be low.
How can companies strengthen the moral courage of employees?
How can a firm minimize its foreign exchange exposure?
Discuss an example that substantiates Dunning’s argument about location-specific
advantages.
Discuss the relationship between culture and national competitive advantage?
The value systems and norms of a country influence the costs of doing business in that
country.
Compare and contrast push strategies and pull strategies.
The international trade secretariats have had tremendous success.
What are some of the issues a manager of an international business must confront that a
manager of a domestic business never confronts?
Explain how the wide variation in union structure around the world has been an
impediment to cooperation between international companies and various unions.
Discuss the idea of compensation or buybacks as they relate to countertrade.
Discuss Confucian dynamism.
Explain how fixed costs impact the decision to locate a plant.
What is human resource management? Why is HRM an important strategic component?
The forward exchange market does not provide adequate coverage for long-term
borrowings.
Describe translation exposure. How can translation exposure be minimized?
Discuss the opportunities arising from the creation of the EU for international
businesses.
Explain how the strategic role of foreign factories evolves over time.